The ‘State’ of Procurement: Giving SME’s a voice…it’s just good business

I recently purchased my grandson his first tricycle. Of course, despite the shiny model on display at the store, ours came in individually sealed 1000+ pieces of impenetrable plastic. Imagine my frustration struggling to pry the last piece loose only to realize assembly required an engineering degree. And you guessed it, there was a piece missing; an integral piece. After my wife did her best to calm down her two infants, one of them mustered the civility to call the company. Having dealt with this sort of thing before I fully expected my patience, comity and graciousness to be tested. To my surprise, the customer service representative offered to send me a second tricycle…not just the missing part…not a replacement… a whole new second trike. Needless to say, I have since been this company’s biggest mouthpiece telling anyone with children to buy from this company.

With firms avoiding customer conflict through the adoption of this kind of good business practice, why does dealing with a public procurement issue have to be so arduous? Yes, there are distinct differences, we are all aware of them: governments are accountable for public funds, fairness and transparency are paramount, processes are bound by legal and regulatory frameworks which are just a tad bit more complicated than driving to your local toy retailer and wheeling your purchase home. But notwithstanding these (among other) legitimate differences, why do procurement disputes with government entities either get swept under the rug or have to result in costly, protracted adjudicated processes?

Well, the answer is that they don’t. The reality is that governments choose to inflict the litigious burden on suppliers. I deliberately say “choose” because an alternative exists which all ignore. It isn't a particularly novel or new. Research on early human social development suggests this approach to resolving conflict existed when stone tools were considered state of the art, it is documented in antiquity, Athenians referred to practitioners as Nautodikai, and the approach was utilized on “lovedays” to resolve conflict between members of medieval English guilds. Trusted, neutral third parties who helped expose the facts and assist parties to resolve commercial conflict have spanned human history.

So with public procurement burdened and viewed with a jaundice eye in virtually every jurisdiction, why the complete lack of traction on the creation of procurement ombudsmen? The Canadian experience provides insight that challenges some common sophistries.

Regardless of where you call home, public procurement is big business; a business heavily populated by SME’s. These firms represent the backbone of western economies, yet rarely are they provided a voice or avenue to address procurement issues. The creation of the neutral, impartial and unaffiliated ombudsman was a clear and unambiguous signal that SME’s mattered. Suppliers now have an avenue to raise issues and express concerns without fear of reprisal. It has provided an independent avenue to deal with the multitude of issues that inevitably arise in the complex public procurement world, informally, without litigators. And all the while permitting for the identification and correction of maladministration and systemic issues that plague the system. Perhaps the biggest dividend being derived from the establishment of an ombudsman is that it has provided a level of public, political and bureaucratic assurance that there is oversight, a procurement system check and balance, that was previously non-existent.

In an era when governments are viewed as isolated and unresponsive, shouldn’t they all take a page out of the tricycle manufacture’s costumer service handbook? Giving SME’s a voice and an avenue to address issues which are bogging down all of our procurement systems shouldn't be extraordinary, it’s just good business.

Author: Frank Brunetta

Date: December 2016

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